Will the selection of Faridabad, Karnal, Ghaziabad and the NDMC areas as smart cities lead to speculative purchase of properties in these areas and push up prices? The answer is no. The ‘Buy the rumour, sell the flat’ may not work in this case, at least for the short term.
While real estate experts agree that queries for properties have increased ever since these cities made it to the smart list, a run-up in prices will have to wait. “There will not be any rise in prices in the short-term. It’s not that if an investor is not getting any returns in Delhi, he will go to invest in Karnal because it has been declared a smart city. It will take some years – at least three to five years after some work has been done on the ground and impact of the mission is felt,” says Anckur Srivasttava of GenReal Advisers.
By and large, Ghaziabad seemed to have done better than Faridabad in terms of infrastructure and even valuation. While properties in Ghaziabad are valued at anything between Rs 4,000 to Rs 5,000 per sq ft, prices in Faridabad they start at Rs 3,000 per sq ft.
Experts also expect momentum to pick up in the commercial segment. “Should there be actual execution, creation of world-class facilities, impact of flow of money from overseas markets, there will be momentum in the market post the announcement. As of now Ghaziabad is primarily an end-user market and Faridabad speculative in nature with more interest in plots and independent houses,” says Shveta Jain, executive director, residential services, Cushman & Wakefield.
Engineering companies like Eicher and Escorts had given a new lease of life to commercial realty in Faridabad in the early 1980s. Post the extension of the metro this month, commercial real estate may get a fillip, say experts. NDMC has also made it to the smart cities list. Experts view this as a balancing strategy. “This is an attempt at an inclusive approach. The fact that the heart and the soul of the Capital, the prime market, has been included in the list helps build a lot of confidence in the realty sector. The area’s inclusion in the list will help recreate interest among companies whose first choice was Gurgaon because of availability of large commercial spaces. Smaller setups may look at CP (Connaught Place) as the first alternative to set up their liaisoning or incubation offices because of its great connectivity and availability of better infrastructure in the near future,” says Jain.